Russia’s Novak: Talk of exiting oil cut deal is premature

Russian Energy Minister Alexander Novak said on Wednesday that it was too early to talk about a possible exit from the global deal to cut oil production, and the eventual withdrawal from the agreement should be gradual.

The Organization of the Petroleum Exporting Countries and other large oil producers led by Russia agreed last week to extend the deal to cut their combined oil production by around 1.8 million barrels per day until the end of next year.

“We can discuss this (exit) at any moment, as soon as we deem it necessary,” Novak told reporters, echoing comments from his Saudi counterpart, Khalid al-Falih.

OPEC would examine progress on the deal – which has already sent oil prices above $60 per barrel and reduced global oil stockpiles – at its next regular meeting in June.

Novak, on a visit to Iraq, said the process of exiting the deal may take between three and six months, depending on how the global oil market has recovered by then, and on the scale of oil demand.

Novak also said Iraq has offered Russian construction companies the chance to take part in the construction of a new oil pipeline from Kirkuk to the Turkish port of Ceyhan.

The new pipeline will replace an old, badly damaged section of the Kirkuk-Ceyhan pipeline. It will start from the nearby city of Baiji and run to the Fish-Khabur border area with Turkey.

The territory that the Kirkuk-Ceyhan pipeline ran through was taken by Islamic State militants in 2014 and subsequently recaptured by U.S.-backed Iraqi forces over the past two years.

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